Kompas.com reports that hundreds of villas in the Badung regency of Bali hold "manipulated" licenses and permits intended to reduce tax liabilities owed to local authorities.
Many villas owners try to avoid paying accommodation taxes by falsely claiming commercial villas as private residences. The chief tourism officer for Badung, Tjokorda Raka Darmawan, said: "there are villas that are actually commercial, but insist they are private. This has created a difficulty for us."
In order to reduce instances of tax fraud, the Badung tourism office is preparing a protocol and litmus-test formula to determine which villas are commercial operations.
In addition to commercial villas operating without the necessary permits and licenses, there are also a large number of villas lacking any kind of permit of any kind. Data from the Badung tourism office shows that only 140 new permits or extension permits for commercial villas have been issued in 2010, while the actual number of commercial villas thought to be operating in the regency total 920 units.
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